Union Bank moves closer to a decision on EIB’s fate
MANILA, Philippines–Aboitiz-led Union Bank of the Philippines expects to complete within this month its due diligence audit on defunct Export and Industry Bank (EIB), for which it had submitted a proposal to come in as a “white knight.”
Speaking to reporters late Monday during the launch of a P5-billion offering of debt notes qualifying as tier 2 or supplementary capital, Union Bank president Victor Valdepeñas said the bank was considering a “different” model for EIB rehabilitation.
Instead of the traditional method of taking over company shares or assuming assets and liabilities, he said UnionBank was considering a new framework.
Acquisition is part of Union Bank’s overall growth strategy to boost competitiveness and meet its goal of becoming one of the country’s top three banks in terms of market capitalization and customer coverage by 2020.
Valdepeñas said this aspiration to be among the top three—which was affirmed by bank chair Justo Ortiz in an investors’ briefing on Monday—was feasible.
Apart from EIB, Valdepeñas reiterated his bank’s interest to bid for United Coconut Planters Bank.
On earnings prospects for this year, Valdepeñas said indications for the first nine months of the year showed that the bank was on track to meet its full-year guidance of P7 billion, lower than last year’s P9 billion due to the decline in trading gains.
Partly offsetting the sharp decline this year in treasury earnings is the consolidation of thrift bank City Savings, which is expected to contribute as much as P2 billion in net profit.
In the first semester, Union Bank’s net profit dropped by 48.8 percent year on year to P3.17 billion. City Savings, which is focused on lending to teachers, contributed around P800 million to Union Bank’s bottom line in the first six months.
